| Critical Credit Fact 1: | | | | Purchasing a car, furniture, a computer, or other large |
| You can boost your credit score and lower your | | | | household appliance through an installment loan might |
| personal debt if you establish separate credit from | | | | help your credit. An installment loan is a purchase |
| your spouse. Entrepreneurs in particular can benefit | | | | agreement whereby the borrower repays the loan in |
| from this tip, which allows you to use your spouse's | | | | equal periodic payments. Having an installment loan is |
| credit when applying for a loan or line of credit. It | | | | one of the fastest ways to increase your credit score. |
| works like this - When applying for credit, transfer high | | | | If you don't have an installment loan, consider asking |
| credit card balances to your spouse's credit cards. As | | | | your local bank for a small loan ($1,000) secured by |
| your outstanding debt is lowered, your credit score will | | | | your existing car, or purchase your next computer or |
| increase, which makes you look like a more favorable | | | | household appliance through an installment loan. |
| candidate for the loan. Of course you will have to | | | | Many furniture stores also offer installment loans, but |
| return the favor if your spouse ever needs a quick | | | | shoppers should be aware that it is sometimes difficult |
| credit score increase. | | | | to determine whether they are purchasing items |
| Critical Credit Fact 2: | | | | through an installment loan or a retail account. Be sure |
| A lackluster credit score may mean higher auto | | | | to ask. |
| insurance premiums. You probably already know that | | | | Critical Credit Fact 8: |
| people with bad credit are likely to have high interest | | | | A single late payment on one card can affect the |
| rates on their credit cards, mortgages, and car loans. | | | | interest rates on all of your credit cards. Many |
| But you probably didn't know that bad credit means | | | | borrowers are surprised to learn about the Universal |
| that in most states your auto insurance premiums are | | | | Default Clause, a small-print item you probably agreed |
| higher, yet another reason those three little numbers | | | | to when applying for your most recent credit card. The |
| can have a six-digit impact on your life! | | | | Universal Default Clause allows credit card companies |
| Critical Credit Fact 3: | | | | to charge you a 29.9 percent interest rate (or higher) if |
| 4 out of 5 people have at least one error on their | | | | you ever make a late payment on any one credit |
| credit reports. According to a U.S. Public Interest | | | | card, even if that card isn't issued by that company. |
| Research Group survey, almost 80 percent of people | | | | Credit card companies periodically pull your credit |
| have errors on their credit reports, 25 percent of which | | | | report and raise your interest rate based on the history |
| are serious enough to cause a person to be turned | | | | of other accounts your maintain. Credit card |
| down for a job or loan. | | | | companies say that they believe your behavior on one |
| Critical Credit Fact 4: | | | | credit card might be the same on all credit cards. |
| Perhaps the most common (and among the most | | | | Critical Credit Fact 9: |
| damaging) error on a credit report is a duplicate | | | | Closing your credit cards could hurt your score, and it |
| collection notice. If you notice more than one collection | | | | will almost never help your score. Because the length |
| agency reporting your account to the credit bureaus, | | | | of time you have had credit affects about 15 percent |
| you should work quickly to have this removed. | | | | of your credit score, closing a credit account will lower |
| Accounts that have been turned over for collection | | | | the average age of your accounts. Allowing credit |
| are often sold by one collection company to another. | | | | cards to become inactive also hurts your score. Use |
| As a result, your outstanding debt will be listed multiple | | | | credits at least once a month, and keep them open! |
| times. | | | | Critical Credit Fact 10: |
| Keep in mind that when a bill is turned over the | | | | Your score will not harmed by inquiries into your own |
| collection, it will appear twice on your credit report: 1) | | | | credit report. If you request your own credit score, the |
| the original creditor will keep the account on your credit | | | | inquiry will show up as a soft inquiry. Unlike hard |
| report, noting the delinquent payment history and that | | | | inquiries (those pulled by potential lenders as a way to |
| the account has been turned over for collection; 2) as | | | | determine whether they should approve a loan or |
| well, the collection agency responsible for collecting the | | | | credit application), soft inquiries do not affect your |
| debt will list the account. However, if multiple collection | | | | credit score. |
| agencies are reporting that they are collecting on the | | | | Critical Credit Fact 11: |
| same account, demand that the duplicate entries be | | | | If your credit score is high enough, some lenders won't |
| removed | | | | consider your salary before giving you the lowest |
| Critical Credit Fact 5: | | | | available interest rate. Indeed, your credit score is |
| Collection accounts only minimally hurt your credit after | | | | perhaps the most important factor in determining |
| two years, and after four years, the damage is all but | | | | whether lenders approve your credit card application, |
| erased. After seven years, a collection account is | | | | mortgage loan, or car loan. It matters more than your |
| wiped from your report. | | | | annual salary and much, much more than your net |
| Critical Credit Fact 6: | | | | worth. |
| You should always apply for credit using the same | | | | Critical Credit Fact 12: |
| first, middle, and last name. For instance, if your name is | | | | Walt Disney and Mark Twain both claimed bankruptcy. |
| Robert Michael Jones, Jr., you shouldn't apply as Bob | | | | Bad credit happens to all types of people. The true |
| M. Jones, Jr., or any of the other variations of your | | | | test of character and responsibility is how a person |
| name. Pick one name and stick with it, or risk having | | | | deals with bad credit. Do not ignore it, hope it |
| your credit information divided among the various | | | | disappears and bury your head in the sand? Or do |
| names. Worse yet, it could be merged with another | | | | you jump in, learn how to fix your mistakes and move |
| person's information (for instance, if you are Robert | | | | forward? |
| Michael Jones, Jr., and your father is Robert Michael | | | | You credit score can have a significant impact on your |
| Jones, the credit bureaus might combine your files if | | | | life - It is your financial reputation. A credit score below |
| you do not use "Jr." when applying for credit). | | | | 720 makes you a higher credit risk to lenders and |
| That said - if you changed your last name upon | | | | creditors. On the other hand, a credit score of 720 or |
| marrying, start applying for credit under your new | | | | greater in most cases automatically qualifies you for |
| name. It might hurt your credit minimally, but the | | | | the very best loans, deals and credit at the lowest |
| damage will be temporary; the new last name is | | | | interest rates. Knowing the facts can make a huge |
| forever. | | | | difference in how you decide to pursue the path to |
| Critical Credit Fact 7: | | | | excellent credit health. |